Keep It Clean

This essay is written around the time of New Year’s Day, and much of the brainpower among entrepreneurs is naturally drawn toward planning the next twelve months. For companies that have begun to scale and have some ability to quantify progress, using Google’s OKR’s – Objectives and Key Results – is a great model for this task. Set a few significant objectives for a period, or a series of periods, and describe exactly what results you are going to measure toward achievement of each of those objectives. In Google’s view, if a result can’t be reduced to a number, it’s not worthy of being on the OKR list. We are going to “hire 10 engineers to build and launch version 3.0 by June 22” can be a Key Result; we are going to “have a happy bunch of engineers fixing bugs in version 2.0 as fast as they can” does not qualify.

A startup in the more formative stage may not find this relevant. You may have one big deal looming that alone will make or break the coming year; you may have reached a dead end with your initial plan and be in the midst of a pivot; or you may have some remixing of the team in progress as you have collectively figured out which of your colleagues can work well with each other. How can you as a founder plan with any precision in the midst of so many moving parts? Your business future for the next year will depend much more on deft leadership than skillful planning. The 2017 film Darkest Hour starring Gary Oldman as Churchill brings to the screen a great example of a singular leader bending an entire nation to his will in fending off the Nazis. He had the pressure of getting his army off the beaches of Dunkirk before he could even think about future objectives. At one point in the movie he even indulged in “customer discovery” by seeking opinions from passengers in the Tube, and he thus stiffened his backbone to do whatever it would take to avoid Nazi rule. You’re familiar with his climactic peroration to Parliament: “We shall fight on the beaches, we shall fight on the landing grounds, we shall fight in the fields and in the streets, we shall fight in the hills; we shall never surrender.” If you are determined to succeed with your endeavor, you too must similarly decide to stay the course at all costs and lead with forcefulness.

All that said, there is one important discipline that you can adopt personally at whatever stage you have reached. That, as the title above suggests, is to keep your business running cleanly. By that I mean don’t create a can of worms by being careless with the myriad operational, legal, financial, regulatory, and HR responsibilities that ultimately trace back to you as a founder. I have long ago lost count of the companies I have evaluated or advised that seemed to have happened with no particular rhyme or reason rather than having been constructed according to some semblance of a blueprint.

For example, many have had no discipline in funding, often poisoning future capital raises by ignoring the basic SEC rules, even selling different instruments with different terms and prices at the same time and giving out options willy-nilly with no consideration of the big picture of dilution and fairness. The resulting cap tables can be deal killers when you do seem to have a viable business and are trying to attract interest from professional investors. And, they are bound to make some participants unhappy and uncooperative when such vagaries come to light. If this type of rudimentary but necessary business activity is not your bent, at least equip yourself with colleagues or advisors who can give perspective on the actions of today relative to the context of their effects on your future.

Lack of HR discipline is another and interrelated area that can come back to haunt you. I have seen many companies who have overlooked the fundamental documentation of work-for-hire situations and have thus exposed themselves to cross-claims on IP ownership and transferring their secret sauces to direct competitors. Those types of issues never come up in the warmth of the early-stage lowly-funded company; they come up explosively when there is real money on the table and Microsoft offers you your dream exit. I have yet to witness personally a company saddled with claims of sexual harassment, but I’m sure that will happen soon enough as well. Your best strategy is to stay ahead of all the HR landmines by having a strong set of agreements and by demanding the highest standards of personal behavior. Again, acting in light of what may happen in the future is critical; have someone at hand who’s seen that future in similar situations and listen to his or her guidance in areas that are not your strong suit.

Undoing all these helter-skelter situations after the fact is far more expensive than giving them proper attention in real time and running a buttoned-up shop. You’re going to have more than enough customer, market, or technology headaches, and you don’t need to add to your misery by being careless. The normal circumstance is that initial resistance to a product-market fit results in fast reactions that involve reshuffling product, marketing, team, engineering and more in a hurry; all the underlying but vital administrative chores sink on the priority list. Your hopes and dreams are trapped on your own Dunkirk, and you’ll cut corners to free them. Don’t. We’re not talking actual life and death matters; we’re looking ahead to a happy business outcome and trying to make sure we haven’t created a trail of needless anguish in our quest to get there.

One advantage of our overwhelming access to technology for record keeping is our ability to do the right things logistically with relative ease. We barely need file cabinets. Who still has a fax (outside of healthcare, where the fax machine is the linchpin of HIPPA compliance)? One disadvantage of this access is that everyone can have a record of everything that has occurred in your business from Day One, including writings, audios, and videos. You have to assume that every action you take as a founder is on the record somewhere. If you’re walking your dog and tempted not to pick up after it, you might just find yourself on the evening TV news. Mutual trust has been replaced by mutual inspection. That’s just all the more reason to run a tight ship and not count on anyone to clean up after you. Somebody else always knows the facts or can easily get them.

Keeping your business clean is not going to make it successful. It the concept doesn’t work, you can’t administer it to glory. However, when you are blessed with the rare idea that is a winner, you’ll be thankful someday that you didn’t trip yourself up short of the payday you deserved.

Best known as a founder and president of Peachtree Software, Ben Dyer is a serial entrepreneur and leading technology advisor. Inducted in 1998 as the 14th member of Georgia's Technology Hall of Fame, Dyer continues to partner and consult with innovative companies to deliver a better future.